PROTECTIVE COLLAR	RATIO PUT WRITE
About Strategy	Protective Collar Strategy This Strategy is implemented when the investor requires downside protection for the short - to medium term but at lower cost. Buying protective puts can be an expensive proposition and writing OTM calls can defray the cost of the puts quite substantially. Protective Collar is considered as bearish to neutral strategy. In this strategy risk and reward is both are limited. This Read more..	Ratio Put Write Option Strategy  This strategy is implemented by selling (short) the underlying asset in the cash/futures market. Simultaneously, sell ATM Puts double the number of long quantity. This strategy is used by a trader who in neutral on the market and bearish on the volatility in the near future. Here profits will be capped up to the premium amount and risk will be potentially unlimited. .. Read more..

PROTECTIVE COLLAR Vs RATIO PUT WRITE - Details

	PROTECTIVE COLLAR	RATIO PUT WRITE
Market View	Neutral	Neutral
Type (CE/PE)	CE (Call Option) + PE (Put Option)	PE (Put Option)
Number Of Positions	2	2
Strategy Level	Beginners	Beginners
Reward Profile	Limited	Max Profit Achieved When Price of Underlying = Strike Price of Short Puts
Risk Profile	Limited	Loss Occurs When Price of Underlying < Strike Price of Short Put - Net Premium Received OR Price of Underlying > Strike Price of Short Put + Net Premium Received
Breakeven Point	Purchase Price of Underlying + Net Premium Paid	Upper Breakeven Point = Strike Price of Short Puts + Points of Maximum Profit Lower Breakeven Point = Strike Price of Short Puts - Points of Maximum Profit

PROTECTIVE COLLAR Vs RATIO PUT WRITE - When & How to use ?

	PROTECTIVE COLLAR	RATIO PUT WRITE
Market View	Neutral	Neutral
When to use?	This Strategy is implemented when the investor requires downside protection for the short - to medium term but at lower cost.	This strategy is implemented by selling (short) the underlying asset in the cash/futures market. This strategy is used by a trader who in neutral on the market and bearish on the volatility in the near future
Action	• Short 1 Call Option, • Long 1 Put Option	Sell 2 ATM Puts
Breakeven Point	Purchase Price of Underlying + Net Premium Paid	Upper Breakeven Point = Strike Price of Short Puts + Points of Maximum Profit Lower Breakeven Point = Strike Price of Short Puts - Points of Maximum Profit

PROTECTIVE COLLAR Vs RATIO PUT WRITE - Risk & Reward

	PROTECTIVE COLLAR	RATIO PUT WRITE
Maximum Profit Scenario	• Call strike - stock purchase price - net premium paid + net credit received	Net Premium Received - Commissions Paid
Maximum Loss Scenario	• Stock purchase price - put strike - net premium paid - put strike + net credit received	Price of Underlying - Sale Price of Underlying - Net Premium Received OR Strike Price of Short Put - Price of Underlying - Net Premium Received + Commissions Paid
Risk	Limited	Unlimited
Reward	Limited	Limited

PROTECTIVE COLLAR Vs RATIO PUT WRITE - Strategy Pros & Cons

	PROTECTIVE COLLAR	RATIO PUT WRITE
Similar Strategies	Bull Put Spread, Bull Call Spread	Short Strangle and Short Straddle
Disadvantage	• Potential profit is lower or limited.	• Potential loss is higher than gain. • Limited profit.
Advantages	The Risk is limited.